Simon Gwynn
Jul 27, 2017

McDonald's CEO: 'We're behaving like a leadership brand'

The restaurant chain has only "scratched the surface" of the potential for delivery, Steve Easterbrook said, following the brand's strong financial results.

McDonald's CEO: 'We're behaving like a leadership brand'

McDonald's revenues for the first six months of 2017 fell 4 percent to $11.7 billion as it continues its refranchising process in the US, but lower costs meant that operating income was up 19 percent to $4.3 billion.

Comparable sales in the second quarter, which take out the impact of factors such as new restaurant openings, were up 6.6 percent globally. In the international lead segment of the business, which covers the largest non-US markets, comparable sales were up 6.6 percent.

The consistent performance of the business was such that it grew both sales and guest count in each of its nine largest markets for the first time since 2008, Easterbrook said in an investor call.

Easterbrook made no attempt to hide his confidence in the brand and its prospects, saying: "We’re fit for purpose with the right structure, right talent and right mindset. We’re behaving like a leadership brand."

Burger on the sofa in your onesie?

Easterbrook used the call to outline what he called the three key accelerators for McDonald’s: digital, delivery, and the roll-out of the "Experience of the Future" restaurant format in the US.

"These new platforms for growth build on our foundation and enhance or accelerate everything we’re doing for our customer," he said. "They bring the most benefit to the most people in the shortest amount of time."

The digital strategy is built on mobile order and pay, which is expected to be available in 20,000 restaurants by the end of 2017, including 14,000 in the U.S.

Delivery is now available in 8,000 restaurants worldwide, Easterbrook said. McDonald's awarded the global account for its delivery service to its roster agency Leo Burnett earlier this month.

The service "illustrates our ambition to redefine convenience for our customers", Easterbrook said. "It also shows how McDonald’s can leverage our size and scale, as nearly 75 percent of the population in our top markets lives within three miles of a McDonald’s."

Delivery was proving to be a spend driver, he added, with the average value of an order typically one-and-a-half to two times higher than in a restaurant.

But, unlike moves such as introducing all-day breakfast in US restaurants, which provided an immediate boost, Easterbrook said, the impact of both mobile order and pay and delivery would be felt more gradually: "It will take time to build awareness, which is the initial step forward to changing customer behaviour."

The brand is today holding a "Global McDelivery Day", in which anyone placing an order for delivery will have the chance to win McDonald’s merchandise including pillowcases, picnic blankets and onesies.

Source:
Campaign UK

Related Articles

Just Published

4 hours ago

Breaking down the post-cookie solutions: Unified ID 2.0

There are dozens of post-cookie solutions. But how do they work and how do they compare to one another across key metrics such as scale, user intrusiveness and tech? This series will attempt to demystify the biggest solutions, starting with Unified ID 2.0.

4 hours ago

PHD adds Audi to SAIC Volkswagen portfolio in China

Pitch-free win of planning and buying follows the agency taking over media duties for the company's Volkswagen and Skoda output in December.

4 hours ago

Four rooms: A quartet of funny short films about ...

For interior-design company Livspace, Singapore boutique agency Societal spoofs four popular film genres.

4 hours ago

China's new tech and stay-at-home brands gain power ...

Embattled Huawei's crown slips as Alibaba Group and Bytedance surge to the top in Kantar's latest Chinese Global Brand Builders report.